What to know about the Meta trial as judge weighs decision

Yahoo

3 days ago

The Federal Trade Commission (FTC) and Meta have wrapped up a six-week trial over the Facebook and Instagram parent's alleged social networking monopoly, leaving the final decision in the hands of the judge.
The trial, which came to a close last week, seeks to determine whether Meta has a monopoly over personal social networking that the company entrenched with its acquisitions of Instagram and WhatsApp.
Here's what to know about the trial and what comes next:
The FTC's trial with Meta represented a full-circle moment for the second Trump administration, after the agency originally brought the case at the tail end of President Trump's first administration.
The agency sued Meta, then known as Facebook, in December 2020. The case came as part of a push by the Trump administration to take aim at major tech firms, following the Department of Justice's (DOJ) antitrust lawsuit against Google.
Big Tech scrutiny has been an area of rare continuity between both Trump administrations and the Biden administration.
Under former President Biden, the DOJ brought a second antitrust case against Google, as well as a lawsuit against Apple. The FTC also sued Amazon.
While Trump's firing of two Democratic FTC commissioners has raised questions about his commitment to aggressive antitrust enforcement, the agency notably did not step away from the Meta trial in the face of CEO Mark Zuckerberg's lobbying for a settlement.
The Meta CEO reportedly courted Trump and White House officials to settle the case in the weeks leading up to the trial.
Zuckerberg, who had a contentious relationship with the president in the wake of Meta's decision to ban Trump from its platforms following the Jan. 6 riots, seemed eager to mend fences after November's election.
Like numerous other tech leaders, Zuckerberg traveled to Mar-a-Lago in Palm Beach, Fla., to visit Trump before he took office, contributed $1 million to his inaugural fund and received a front-row seat at his inauguration.
However, these efforts don't appear to have paid dividends. The Meta CEO's initial offer of $450 million was brushed aside, with the FTC demanding at least $18 billion and a consent decree, according to The Wall Street Journal.
Zuckerberg reportedly upped his offer to $1 billion, but to no avail. The Meta trial began mid-April, and the FTC immediately called Zuckerberg to the stand, where he spent three days facing questions.
At the heart of the trial is the FTC's claim that Meta has a monopoly over personal social networking — a market that includes Meta's apps, Snapchat and MeWe and is centered on sharing between family and friends.
Meta has pushed back on this market definition, arguing it faces competition from a much broader swath of social media platforms, including TikTok, YouTube, X and iMessage.
U.S. District Judge James Boasberg has seemed skeptical of the FTC's proposed market, noted Geoffrey Manne, president and founder of the International Center for Law & Economics.
'The judge has expressed some reservations about the way the FTC is trying to demonstrate its market definition, but obviously the underlying issue is monopoly power,' Manne told The Hill.
'It's a really tough case in this regard because … there seems to be no qualitative evidence that's really going to answer the question,' he added.
Boasberg's concerns about the market have been a 'recurring theme' in his comments going back to November, when he refused to dismiss the case, said former FTC Commissioner William Kovacic.
'He nonetheless cautioned that the government had important hurdles to clear, and one of them was the relevant market,' Kovacic said.
'It's always a little bit risky to infer a specific point of view from questions that are posed or comments that are made in the courtroom, but it seems to me that the judge still has doubts about the delineation of the relevant market, and the FTC has to defend its definition or the case founders,' he continued.
Because most social media platforms are free, it's not possible to identify Meta's competitors using price data, as antitrust cases often do, Manne noted.
Instead, the FTC and Meta have had to rely on other forms of evidence to back up their claims. The government has used advertising load, contending Meta has placed more advertisements on Instagram than it would otherwise, degrading the user experience.
Meta, on the other hand, has relied on user data, showing that users move between TikTok and Meta's platforms interchangeably. For instance, the company pointed to data finding that when TikTok briefly went dark in January, it drove users to Facebook and Instagram.
'After six weeks trying their case to undo acquisitions made over a decade ago and show that no deal is ever truly final, the only thing the FTC showed was the dynamic, hyper-competitive nature of the past, present and future of the technology industry,' a Meta spokesperson said in a statement.
'Meta is a proud American success story, and we look forward to continuing to innovate and serve the people and businesses who love our services,' they continued.
The FTC has accused Meta of violating antitrust law by attempting to eliminate potential competitors with two key acquisitions — its purchases of Instagram in 2012 and WhatsApp in 2014.
The focus on Meta's acquisitions creates a real risk for the social media giant that a loss could result in a breakup.
However, the FTC may also be facing an uphill battle as it tries to prove the Instagram and WhatsApp purchases were anticompetitive, blocking the two once independent companies from developing into Facebook competitors.
This results in a 'highly speculative world' that relies heavily on Meta's intent at the time, Manne said.
'You have an entity like Instagram that may or may not have been in any way successful, that may or may not have evolved in a way to actually be a challenge to Facebook, that may or may not have evolved in any way to become bigger than it was when Facebook bought it,' he told The Hill.
'It's never going to be dispositive, and I guess I'm afraid, from the FTC perspective, that they don't have a lot more than that,' he added.
The FTC has presented numerous emails and messages from Meta executives, including Zuckerberg, suggesting they had real concerns about Instagram and WhatsApp becoming threats to Facebook prior to the acquisition.
'I thought The FTC did a good job of … reconstructing Facebook's state of mind when the mergers took place, and I think they did a good job of underscoring Meta's anxiety that the transactions were necessary in order to forestall the emergence of competitive rivals,' Kovacic said.
'Yet, even so, it seemed to me that the real core issue in the case is not so much what Meta has perceived at the time, but rather the actual consequence of the mergers as they unfold throughout the decade,' he added.
The trial has wrapped, but the two sides have a post-trial briefing schedule that stretches into September, meaning any decision is unlikely before the fall.
If the judge rules against Meta, the case would progress to a second phase to determine the proper remedies.
Google, which was found last August to have an illegal monopoly over online search, overlapped with Meta at the Washington courthouse in April and May, where it appeared for a three-week remedies hearing.
The search giant is seeking to keep its company together as the DOJ pushes for a breakup that would split off its Chrome browser.
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